February's unemployment rate came out today and remained at its January level of 9.7%. It was interesting, and not surprising, how the media spun the news--"employers cut only 36,000 jobs." 36,000 people lose their jobs, and that's good news. Well, I guess it is, considering it was "better than the 50,000 cuts forecast by economists." Folks, let me put you in on a little secret--economists have absolutely no idea, none, month-to-month, how many people are going to be hired or laid off. It's a complete and total guess because no one can forecast what people will do of their own free choice. And if an employer hires or fires, he does it of his own will and not because an economist predicts it. The very fact that EVERY MONTH something "better than expected" or "worse than expected" is reported is full indication of that. Keep a watch out for those two phrases; you will literally see them each month. I know, because I look for them and chuckle. The news media has a macro for both. Case in point: the article I quote from above is entitled "Stocks Jump After Better-Than-Expected Jobs Report."
But, is this good news--a stable unemployment rate? Does it indicate, as the media has been trying to tell us for months, that the economy is getting better (if they keep reporting that, at some point they are going to be right). Well, perhaps. But do consider this as well--Congress hasn't done anything but argue for several months now; they haven't passed any legislation of note that would be intrusive upon the economic, investment sectors of society. Those who provide the jobs and investment are still skittish, believe me. Talk of higher taxes through health care reform, cap and trade, etc., are not encouragements to invest. The Obama administration simply has business worried; you don't go and borrow a lot of money to invest in your business if you don't know what the government is going to do, and if you fear that higher taxes and regulation will put a greater squeeze on your profits and income. As long as Congress is in gridlock--and will let the American people alone--we'll probably see some improvement in the economy. But not much, until Obama signals a pro-business, pro-investment direction, something he has done the exact opposite of so far in his administration.
But people have got to make a living and the layoff figures last month were...better than expected. Keep Congress gridlocked and that might...might...continue. Businesses still have to look at the long term and, again, Obama is giving them no encouragement in that direction.
